How The Tokyo Olympics Became The Most Expensive Summer Games Ever | So Expensive

Summary

The Tokyo 2020 Olympics, already the most expensive Summer Games in history, have faced significant financial struggles, from skyrocketing construction costs to a postponed timeline amid a global pandemic. Initially estimated at $7.3 billion, the cost has ballooned to $26 billion, with over-budget venues, labor shortages, and delayed operations adding to the burden. Despite the public's growing opposition, the International Olympic Committee and corporate sponsors are pushing forward, hoping for a profitable broadcast. The financial toll on both Tokyo and athletes highlights the broader economic risks and challenges of hosting the Games.

Takeaways

• 😀 The Tokyo 2020 Olympics are the most expensive Summer Games ever, with costs ballooning from an initial estimate of $7.3 billion in 2013 to over $26 billion.
• 😀 A major factor driving up costs is the construction of 43 venues, including the National Stadium, which faced significant budget overruns.
• 😀 The National Stadium's design, originally planned by Zaha Hadid, was scrapped after costs exceeded $2 billion. A second design by Kengo Kuma still cost $1.4 billion.
• 😀 The depreciation of the Japanese yen increased the cost of imported construction materials, further inflating project costs.
• 😀 The Olympics also require 21 new buildings in the Olympic Village, with a near $2 billion price tag, and these buildings remain largely empty after the Games.
• 😀 Delays due to the COVID-19 pandemic added an additional $1.6 billion in costs, including maintenance for venues, increased security, and a year-long rental of the Olympic Village.
• 😀 The IOC's primary concern is attracting the most viewers, and they do not share in the financial burden of the host city, as they earn most of their revenue from broadcast rights.
• 😀 Tokyo is expected to lose out on over $850 million in ticket sales, adding to the financial strain caused by the Games.
• 😀 The estimated cost of COVID-19 precautions is $900 million, bringing the total delay-related costs to around $2.8 billion.
• 😀 The financial risks of hosting the Olympics have prompted athletes, like gymnast Allan Bower, to face significant personal costs, including the expense of maintaining training facilities during the pandemic.

Q & A

What was the initial cost estimate for the Tokyo 2020 Olympics in 2013?

The initial cost estimate for the Tokyo 2020 Olympics in 2013 was $7.3 billion.

How much has the cost of the Tokyo 2020 Olympics increased since the initial estimate?

The cost has increased to $26 billion, according to expert estimates.

What contributed significantly to the rise in construction costs for the Tokyo Olympics?

Rising labor costs, the depreciation of the yen, and increased import costs for construction materials were major contributors.

What was the financial impact of the delay of the Tokyo 2020 Olympics?

The delay added an additional $1.6 billion in operational costs, including maintenance, security, and rental of the Olympic Village for a year.

Why did the cost of the National Stadium escalate so dramatically?

The National Stadium's costs escalated due to design changes, with the initial architect's plan reaching $2 billion, which was scrapped, and the new design still costing $1.4 billion.

How did the Tokyo Olympics impact the local economy in terms of revenue?

Tokyo was expected to lose $850 million in ticket sales, and the IOC's reluctance to share revenue from broadcasting rights meant the city would see almost no benefit from the games' global audience.

What role did the International Olympic Committee (IOC) play in the cost overruns of the Tokyo Olympics?

The IOC did not invest in infrastructure but maintained strict venue size requirements, which contributed to higher costs for the host city.

How did the COVID-19 pandemic affect the athletes' preparations for the Olympics?

Athletes, like gymnast Allan Bower, faced significant challenges in training due to the pandemic, with many having to set up makeshift gyms and bear the costs of equipment and facilities themselves.

What was the financial loss that Japan faced if the Olympics were completely canceled?

Japan faced an estimated financial loss of $2 billion to $3 billion in insurance losses if the Olympics were fully canceled.

How did the Tokyo Organizing Committee adjust its budget for the Olympics?

The Tokyo Organizing Committee increased its budget to $15.4 billion, which is twice the original estimate, though some experts and Japan's auditor believe this figure is still too low.